Welcome to 2020, when it took just three days for the chief executives of FTSE 100 firms to earn more than ordinary UK workers will in the whole of the year, according to a new report from the High Pay Centre.
This issue was also highlighted by the Irish Congress of Trade Unions (ICTU) in its annual report scrutinizing executives’ pay in Ireland. It revealed an unjustifiable gap between the top executives and average workers’ earnings in a study of 26 companies.
It found that while the pay of average full-time workers rose by 2.6% in 2018, CEO remuneration increased by between 9% in Permanent TSB to a massive 99% in Smurfit Kappa.
Meanwhile, cement company CRH maintained its astounding CEO-to-worker pay ratio of 212-to-1. In other words, it would take an average CRH worker 212 years to earn what their top executive took home in one.
The report found that basic pay forms just 37% of the executives’ total earnings, with the lion’s share coming from bonuses, benefit-in-kind and share options.
The report points out that, as publicly-listed companies are the only ones obliged to disclose remuneration information, lucrative executive pay packages in private companies remain a mystery.
ICTU has been pushing for the adoption of an EU shareholders rights directive to improve transparency by introducing mandatory reporting of directors’ pay as a ratio of the average pay of their full-time employees.
Congress social policy officer Laura Bambrick pushed for the speedy implementation of this directive. “The new EU shareholder rights directive, which was due to have become Irish law by June last year, is a good first step in pay transparency and tackling wage inequality,” she said.
The European Commission says Ireland has the highest market income inequality (pre-distribution income before tax and social welfare) in the EU.
Read The Truth About CEO Pay In Ireland here.